The multisource feedback is a method of evaluating employees, using more sources, multiple evaluators in different hierarchical and functional positions towards the evaluated person, inside or outside the organization. It is preferable that every evaluator to tell their opinion anonymously, so that the risk of biases be low.

It is a greatly used system, US studies showing that over 70% of the companies put it in practice on a regular basis.

The motives of its popularity are very clear: the results of a multisource feedback are more relevant than the ones of an objectives evaluation, as it shows not only the capacity or incapacity of employees to perform, but also offers a diagnosis for the obtained results. Moreover, the costs, the time dedicated and the necessary logistics are by far lower than in the case of assessment centers, a thing not at all to be neglected. But maybe the most important motive is that in this type of processes can be included evaluators who where ignored by the classical systems. Mainly I’m talking about the clients of some companies, the voice that must always be heard and which needs to express its opinion regarding the company’s employees and their performances.

Even so, in the local companies the use of such a feedback is relatively low. A study made by ITEX(not so formal to be taken as reference, but sufficiently documented to be taken as an example), shows that from the 40 local top managers questioned, none of them have yet implemented in their own company or in the department that they run, performance evaluation systems. None what so ever. From them, 38 would like to implement a multisource feedback system, and 2 of them believe in the power of single source or “one on one” feedback (unstructured discussions between direct manager and employee).

The obtained results are more surprising as they where collected in a maximum point of economic crisis. Our expectations where different: in a difficult period, the managers’ focus should be that of identifying the highly performance employees, which make the difference and of those dispensable, that only generate costs. Even so both layoffs and the crisis strategies where made without a previous analysis of individual and group performances.

How does multisource feedback help?

The main benefit of evaluating performances is represented by …performances themselves. Through circular feedback you don’t just evaluate employees but you also help them understand what it is expected from them. Moreover because of the multiple sources of opinion they tend to change their behavior easier. Among the main benefits, therefore I list:

->Improving organizational communication and environment;
->Improving relationships with clients, suppliers, partners;
->Creating an organizational map of high performance employees and of lumber, of dispensable employees. This is a starting point for establishing personnel necessary and forms of contingent remuneration (wages increases, bonuses).

What is the greatest benefit?

Multisource feedback is like an adjuvant, the company’s multivitamin. Consumed periodically (at least twice a year), it sets goals, makes the difference between those doing their job and those who don’t, optimizes employee costs and their level of motivation. It sets normality, excellence and mediocrity, three categories of human capital that should be very clear to each manager.

What is the real greatest impediment in performance evaluation?

The biggest impediment is that of describing performances, of detailing it in specific, measurable, objective and relevant indicators. A specialist who knows the organization, its objectives, the people, can easily make this thing a reality. Let’s not forget that setting relevant indicators is done only at the first evaluation. Afterwards, their actualization is facile and takes little time.

What should and shouldn’t you do when evaluating employees with 360 degrees method?

->Forget about the paper! It doesn’t express trust, confidentiality, it doesn’t guaranty objectivity.
->Do not exclude yourself from the process! The fact that you are the one who runes a company or a department doesn’t give you the right to dodge from receiving feedback. It’s a negative example which can damage.
->At the end of an evaluation take decisions. Praise, criticize, promote, train, retrograde, layoff or increase salary, the important thing is to exist consequences.
->Despite preconceived ideas, not all evaluation processes should be correlated with remuneration. In case this thing is intended, you must be communicated clearly, transparently and in advance which evaluation project will determine modifications in the wage/bonus grid (for example, the evaluation from the beginning of the year).

This article appeared in the Market Watch magazine, nr. 122/February 2010